On-chain data shows that long-term holders of Bitcoin have seen a sharp net increase in supply over the past month.
The supply of long-term Bitcoin holders is growing rapidly at the moment
As CryptoQuant Community Manager Maartunn explains in a new report mail On X, the BTC supply has recently begun to mature into a long-term holder pool. “Long-term holders” (LTHs) refer to Bitcoin investors who have held their coins for more than 155 days.
LTHs make up one of the two main divisions of the BTC sector based on hold time, while the other group is known as “short term holders” (STHs). STHs generally represent the volatile side of the market, while LTHs contain the firm hands.
There are several indicators to track the behaviors of these two groups, one of which is the LTH Net Position Change. This metric, as the name suggests, measures net changes in the combined supply held by HODLers. When the value of this metric is positive, it means that the supply of LTH is rising. On the other hand, if it is less than zero, this indicates that a net number of coins are coming out of this group’s holdings.
Now, here’s a chart showing the trend in Bitcoin LTH’s 30-day net position change across the cryptocurrency’s history:
The value of the metric appears to have seen a large positive spike in recent days | Source: @JA_Maartun on X
As shown in the chart above, Bitcoin LTH’s 30-day net position change fell to sharp negative values as BTC price rose to a new all-time high (ATH) in the first quarter of the year. This suggests that even these investors, who are not inclined to sell easily, could not escape the allure of profit-taking that came with the rally. The diamond hands continued to make profits for a while, even when the coin reached its peak.
However, in recent months, the gauge has shown a turnaround, with a particularly large rise over the past month. Over the past 30 days, the supply of LTHs has increased by 959,000 BTC, which is a very large amount. However, there is something that should not be misinterpreted, which is what this positive rise in net position change indicates. The LTHs didn’t “buy” anything that high, all that happened was that some coins, purchased 155 days ago, have now been held long enough to qualify for this pool.
While the HODLer backlog has a delay of 155 days associated with it, the same does not apply to selling. Coins exit the LTH supply once their dormancy is broken by an on-net transaction, so the sale can be considered to be immediately reflected on the indicator.
Diamond hands may or may not have been involved in “buying” Bitcoin recently, but the fact that the coins are maturing on the network is still a positive sign anyway, as it indicates that investors are willing to HODL right now.
Bitcoin price
Bitcoin has fallen another 3% in the past 24 hours, and is now down to the $60,800 level.
Looks like the price of the coin has been slipping down recently | Source: BTCUSDT on TradingView
Featured image by Dall-E, CryptoQuant.com, chart from TradingView.com